Welcome To The 2015 Spectrum Season!

Happy New Year faithful readers! Following in the footsteps of Congress, The Daily Show, and just about everyone else here in D.C., I’ve been on hiatus for the last month or so getting rested and rejuvenated for the exciting new year of 2015. In particular, I am extremely excited about this year’s roll out of the “Spectrum Wars” series. To make life easier for everyone (and more entertaining for myself), I will provide some summaries of the major regulatory issues currently on the table — including what TV series they resemble. As this is primarily intended for people trying to catch up on existing proceedings, I’m not going to speculate on new things that might happen.

Enjoy below . . . .

Regular followers of spectrum policy will recognize that 2013 was mostly a filler year, while we waited for young energetic and somewhat goofy FCC Chairman Julius Genachowski, played by Matt Smith, to regenerate and be replaced by the older, grimmer and more focused FCC Chairman Tom Wheeler (played by Peter Capaldi). This takes nothing away from the bang up job Commissioner Mingon Clyburn accomplished as the 2013 summer replacement Acting FCC Chairwoman, whose tenure somewhat resembled Marvel’s Agent Carter Series in that it was about a strong woman breaking into a sexist all male profession and laying the groundwork for a lot of important stuff down the road (in Clyburn’s case, 700 MHz interoperability, privacy). But as a result, 2014 ended up being mostly about character development with one off episodes like “Cell Phones On A Plane” or basic plot build up like H Block and AWS-3 Auction, Incentive Auction Framework, and, of course Net Neutrality NPRM.

Happily, that makes 2015 the year of action packed resolution and major plot advancement for most of our major spectrum series. We can also expect to see one or two short lived interim series and one-off specials. Here are TotSF hot picks for the 2015 spectrum policy season.

The Incentive Auction

Plot Synopsis: The FCC will conduct the first-ever-in-the-world “two-sided spectrum auction.” Full power broadcasters will offer to give up some or all of their current spectrum use rights, the FCC will convert this into a cohesive band plan for the country and then auction the licenses to wireless companies for mobile service. Because broadcast spectrum is particularly useful for mobile broadband, everyone expects this to generate tons of money – provided enough broadcasters show up to participate and provided they don’t price themselves out of the market with inflated spectrum valuations. In addition, the competing wireless carriers (everyone but Verizon and AT&T) and a number of consumer advocate groups (such as my employer Public Knowledge) want the auction rules to promote competition by ensuring that Verizon and AT&T can’t win all the good licenses.

As if that weren’t complicated enough, the FCC must decide what to do with other services that already use the broadcast bands. Can the FCC structure things so that these very different services can coexist together in the remaining broadcast bands? Or will the some services have to be sacrificed so that others can thrive?

Why: This long running favorite boasts a conflict between the old aristocracy (full power broadcasters) deciding whether to embrace or reject an ever-changing world with massively different expectations against a background of rapidly changing technology. They compete with the nouveau riche (wireless companies) for power, influence, and above all, money. But even within these supposedly homogenous communities of broadcasters v. wireless providers, we find endless melodrama over conflicting agendas and changing alliances. Meanwhile, just to make life more complicated, we have a dizzying cast of “below stairs” characters (unlicensed spectrum/TV white space (aka TVWS), Low Power Television (LPTV), Wireless Microphones, and Wireless Medical Telemetry Service (WMTS)). Huge events outside of the characters’ control keep intruding. Instead of the sinking of the Titanic, we have the House Commerce Committee Oversight hearings. Instead of WWI, we have Republican Commissioners Ajit Pai and Mike O’Reilly.

It huge, sprawling and dramatic, involving a massive cast of characters and more plots and subplots than any sane person can keep track of – even if you are totally into it. Also, it’s the only wireless proceeding that involves PBS.

Major Plot Points For This Season: When we left last year, the FCC had adopted a general framework for how to manage the auction and finally released its proposed basic rules on how it will conduct bidding for the forward auction (where the carriers bid for spectrum) and the reverse auction (where the broadcasters decide what they will accept). Needless to say, this left a lot of people unhappy. And, of course, we had the traditional “big earthshaking event that will change everything but we don’t know how” in the form of the AWS-3 auction. Because this is so big and sprawling, I’ll pull out the major plot points to look for this season separately.

Broadcaster lawsuit. Those broadcasters who don’t participate in the auction will need to be relocated into the surviving broadcast band, a process called “repacking.” The more discretion the FCC has to repack broadcaster, the more spectrum they can free up to auction. Needless to say, the broadcasters do not like the prospect of being shoved around and potentially losing portions of their coverage area. In the 2012 Spectrum Act authorizing the FCC to run the Incentive Auction, Congress put a bunch of restrictions on how the FCC can do the repacking.

A part of the May 2014 Order adopting the Incentive Auction Framework, the FCC made a bunch of determinations on the repacking some of the broadcasters don’t like. They sued in federal court, saying the FCC went beyond what Congress permitted in 2012. The FCC says that if the broadcasters win, they will need to reconsider the entire framework, potentially setting the auction back years. The broadcasters claim that’s nonsense and the FCC can easily accommodate what they want without disrupting the auction planning.

The D.C. Circuit will hear the case this year and probably decide sometime in the second half of 2015.

Why does this matter? Because in the Spectrum Act of 2012, Congress designated a set of auctions, the H Block auction, the AWS-3 auction, and the Incentive Auction, to raise $25 billion to pay off the new national public safety network FirstNet and reduce the deficit. Anyone who has followed Incentive Auction Abbey since then knows that one of the major driving forces for the FCC in making policy decisions (whether anyone is gauche enough to talk about money or not) has been the fear that the auctions won’t meet that goal. In particular, folks worry about funding FirstNet, and that cloud influenced a bunch of the decisions in the May 2014 Framework Order.

The AWS-3 auction takes care of that. No longer needing to worry about paying off FirstNet theoretically removes a major worry and frees folks to focus on the best policy outcome (assuming they can figure out what that would be). Which brings us to the next plot point.

Wireless competition. The FCC decided to set aside some spectrum for wireless companies that don’t have much “lowband” spectrum like the broadcast spectrum. Effectively, that means a reserve of spectrum that AT&T and Verizon can’t bid on. Since no one knows how much spectrum will be reclaimed from broadcasters, this works on a sliding scale from 0 (if the reverse auction only reclaims 40 MHz) to a maximum of 20 MHz (if the reverse auction reclaims 60 MHz or more). A lot of folks (myself included) did not think this was nearly enough in the reserve, the original proposal pushed by Chairman Wheeler and supported by Democratic Commissioner Mingon Clyburn would have set the reserve at 20 MHz no matter what. But Democratic Commissioner Jessica Rosenworcel got cold feet at the last minute that the auction might not raise enough money to fund FirstNet, the magnum opus legislative project of her former boss retiring Senator Rockefeller (D-WV). (I told you this was filled with melodrama!) Since both Republican Commissioners were opposed to any reserve, the other Dems scaled back the Order to satisfy Rosenworcel.

So, with FirstNet paid for, will we see the FCC reconsider and beef up the reserve? Or will the lust for money tempt even those previously more concerned about competition and the public interest? Also, we need to see who actually won all the AWS-3 licenses. The reason to create a reserve for competing carriers is that they can’t win enough licenses to stay competitive because of the way auction mechanics work. (See my old blog posts here and here for discussion.) If AT&T and Verizon once again emerge from the AWS-3 auction with the bulk of the good licenses in the major markets, that will weigh heavily for a reserve. If we see T-Mobile, DISH, and other competitors coming out of the auction with respectable showings, it will give AT&T and Verizon an argument against any reserve – let alone expanding it.

Bidding Rules and Forbidden Love. The FCC released its bidding rules and prohibit any of the top 4 wireless companies – AT&T, VZ, T-Mo, and Sprint – from forming a joint bidding consortium. This was mostly motivated by concern that Sprint was trying to buy T-Mobile, a forbidden love and the Powers That Be showed their disapproval of any such union. Also, T-Mo’s parent Deutsche Telekom, really began to think that maybe T-Mo could do better than this charming fellow with the talking hamster and the sinking market share. So the two broke off their on-again off-again engagement, apparently for good.

But just because they aren’t going to shack up doesn’t mean they can’t still work together if it helps consumers and makes them better competitors. Or would it? Would letting these two firms we want to see compete against each other working together rekindle that old merger spark, or lead to – dare we say it – collusion? Scandal!

Given the $45 billion raised in the AWS-3 auction, we can expect a lot more broadcasters to think about participating. But will the inflated values cause a crash? Will this be roaring 20s or just the Crash of 1929?

Unlicensed spectrum and the rest of the “Below Stairs” Cast. Incentive Auction Abbey doesn’t just give you the complications of the primary licensee upper class. We also have a huge cast of “below stairs” characters. Unlicensed TV white spaces (TVWS) is the relatively new guy in town, a young enterprising modern spectrum service that promises to revolutionize how people use spectrum, bring modern comforts and convenience to the masses and change the world for the better. If only it could get permission from the powers that be and the right rules! After more than a decade of trying and overcoming obstacles from the powers that be and the forces of the status quo, TVWS finished up last season with a May 2014 Framework Order that created what could be the breakthrough opportunity! Provided TVWS can navigate the next round of rulemaking an prove that it won’t cause interference with either the full power broadcasters or the wireless companies.

But of course there’s a hitch. Traditional services Low Power TV (LPTV) and wireless microphone don’t hold with this new fangled TVWS. These new fangled things interfere with traditional values like newsgathering, local broadcasting, and the Way We Secondary Licensees Have Always Done Things. It’s not that LPTV and Wireless Mics are bad people, mind you. But as the incoming Wireless companies squeezing out their old friends the full power broadcasters mean more and more of them are getting “let go.” As the world changes, many people are asking if we even need LPTV or licensed wireless mics anymore.

Last season, the angry and resentful LPTV and Wireless Mic services refused to even think about working with TVWS. Instead, they insisted that as actual licensed services (even if only secondary licensees) they certainly were not going to give way to any unlicensed service. Time to draw the line somewhere and insist on our rights! This strategy ended up going nowhere. Instead, the FCC issued a bunch of notices of proposed rulemakings for these services as well.

As we open this season, we start with the question, will the TVWS, LPTV and Wireless Mics finally learn to set aside their differences and work together? Will they find a way to all get along? Will they all get swept away in the fights between the full power broadcasters and the wireless companies?

OK, that’s enough Incentive Auction Abbey, now a little comedic break with an early season mini-series.

The Marriott Wi-Fi Jamming Petition

Plot Synopsis: The Gaylord Hotel chain, owned in part by Marriott, got caught blocking a guest’s private Wi-Fi. The FCC Enforcement Bureau responded to the complaint and found that Marriott hade violated 47 U.S.C. 333, which prohibits willful or malicious interference with any radio communications “licensed or authorized by or under” the Communications Act. While settling with the FCC for $600K and a promise not to do it again, Marriott filed a request for a declaratory ruling or rulemaking purportedly to ask for guidance on how to address “cybersecurty threats,” but mostly to argue that Section 333 doesn’t apply to unlicensed spectrum like Wi-Fi. By total coincidence, Marriott makes beaucoup bucks selling Wi-Fi services in its convention areas that people can now route around by using their own devices like Mi-Fi. While to everyone else it looks like Marriott wants to protect its overpriced Wi-Fi service, Marriott assures us that is so totally not true and it’s really all about protecting their guests.

Why: Like Galavant, it features a ridiculous premise, a comic-book greedy bad guy, and lots of tap dancing. But it’s so goofy and outrageous you can’t help but keep watching.

Major Plot Points For this Season: The FCC has never authorized deliberate jamming or interference with any communication by private parties. I don’t really expect it to start now. However, Marriott has managed to sucker a few other folks with its impersonation of Vinnie Barbarino going “I’m sooo confused!!! How can I deal with possible cybersecurity issues and network management without being able to jam other networks” routine that the FCC will, hopefully, issue an Order reaffirming the obvious – nothing could be worse for the stability of the wireless infrastructure than unleashing a horde of trigger-happy, self-interested vigilantes jamming everyone else in range in the name of “cybersecurity.”

Plot Synopsis: In 2012, the President’s Council of Advisors on Science and Technology (PCAST) issued a major report on federal spectrum policy. The Report found that while non-federal demand for spectrum access kept rising, it was becoming increasingly harder and more expensive to clear federal users to auction spectrum for commercial use. The federal government and the FCC therefore need to start thinking of new ways to share the increasingly crowded airwaves among federal users and non-federal users.

The FCC and the federal government selected the 3.5 GHz to 3.65 GHz band, primarily used for high power costal radar systems, to serve as a testbed for new sharing technologies that could allow shared use between commercial users and federal users under a variety of different approaches.

Why: Every time our heroes seem on the verge of building a new world, they get attacked by zombies. Led by long time hater of expanding innovative unlicensed technologies Qualcomm, the usual mix of cell companies and their equipment manufacturers keep trying to shift things back to a model that looks much more like traditional auctions and exclusive licensing. Likewise, every time the federal government seems on the verge of cooperating, the military raises the same arguments about how they need exclusive control of the spectrum or ISIS terrorists armed with Ebola guns will invade us. As if that weren’t enough, disagreements between the companies hoping to develop shared access technologies keep threatening to derail things.

Plot Synopsis: The (relatively) new IEEE 802.11ac standard promises to boost the potential throughput on Wi-Fi to entirely new levels of awesomeness. Doing that requires a relatively large swath of contiguous open spectrum for unlicensed operation. Up in the 5 GHz band, there is a bunch of stuff that got allocated to unlicensed as part of the Unlicensed National Information Infrastructure (U-NII). But the band is a mess. At the top of the band is stuff in 5.8 GHz used by a lot of WISPs. At the lower end of the band we got stuff that is allocated for unlicensed, but with expensive rules to protect some neighboring military radar operations. (Damn those things are everywhere!) Some portions of the band (the UNII-1 part) were limited to indoor only operation.

On the other side of the band is a bunch of spectrum that got allocated to the auto industry and Department of Transportation (DOT) for “intelligent transportation” back in 1995. In 2012, noticing that the auto industry had done absolutely nothing with this for about 20 years, the FCC proposed reallocating it for unlicensed. Needless to say, the auto industry and the DOT have no intention of surrendering “their” spectrum without a fight! Can the FCC cobble together the pieces of this broken band to open up space for more efficient Wi-Fi?

Why: Epic battles rage across two continents (well, two federal agencies)! Vast armies of powerful special interests battle one another. Smaller interests and public interest advocates rise and fall with the endless tide of changing plot twists. And, after years of watching this, it’s damn hard to keep straight what the heck is going on and you kinda start to lose interest. But you keep watching because if something significant ever did happen, it would be EPIC!

Meanwhile, plans by wireless carriers to use unlicensed spectrum for LTE (LTE-U) threaten to pollute the whole 5 GHz band and kill any possibility of getting enough spectrum for 802.11ac. Wireless carriers insist that won’t happen, but even if it does — tough nuggies unlicensed dudes.

Can WISPA get the FCC to consider the rule change in the 5.8 GHz portion of the band, or will dozens of rural communities lose their broadband connectivity? What will happen with U-LTE. And is anything ever gonna happen with the auto industry and the DOT plot thread? These guys have been dicking around for 2 years now and the FCC, the supposed master of the public airwaves, can’t do jack about it. Srsly?

Globalstar Petition

Plot Synopsis: Globalstar, a satellite communications company, operates in 2.4 GHz spectrum adjacent to the major band used for Wi-Fi. Globalstar has asked for permission to operate a “low-power terrestrial service” (LPTS) that would work just like Wi-Fi, except Globalstar would own it. The FCC has proposed rules that would allow that, with possibly tweaking the rules to allow use of another channel of Wi-Fi for the public in exchange (although Globalstar is not thrilled with that). Globalstar has also offered to provide 25,000 hotspots using its Pay-Fi spectrum to public safety and educational institutions – with details to follow once the FCC gives it the goodies.

Why: Outside of a core audience of Wall St. analysts that follow this religiously, no one else really gives a crap about it. It’s not really clear why this keeps getting renewed every season, but that’s basic cable (or the FCC) for you.

Major Plot Points For This Season: In theory, Globalstar can make big bucks off of this. It’s a fairly trivial software modification to get equipment that works for standard Wi-Fi to work for Globalstar’s Pay-Fi. OTOH, it’s not clear that anyone really wants to pay for stuff they get for free. General consensus of the comments was “if Globalstar can show this won’t interfere with existing Wi-Fi or Bluetooth operations, why not?” Globalstar, OTOH, maintains they don’t actually have to do any testing and that it is the responsibility of folks claiming there will be interference to do testing.

My personal view is that Globalstar can either do some testing with one of the established players in this space (e.g., NCTA/Cablelabs, WISPA) now, or wait for the International Bureau to send this to the 8th Floor and have a fight about it then. Because there is simply no way on this God given Earth the FCC will put the major band for Wi-Fi and Bluetooth at risk. It’s also a toss up to me whether this is sufficiently small potatoes that it just slips through with no one caring, or if it gets lost in the crush of other issues and keeps getting pushed to the back burner.

Why: Like Phineas and Ferb, the Net Neutrality debate has been going on for 10 years. Also like Phineas and Ferb, every episode is basically the same. We keep debating the same points. At this point, either you believe paid prioritization is bad or you don’t. Either you believe forbearance is easy-peasy or you don’t. Either you believe reclassification will kill investment or you don’t. Every now and then I get the urge to turn to Matt Wood at Free Press and say: “Matt, I know what we’re going to do today, AND EVERY GODDMAN DAY FOR THE NEXT 8 MONTHS!!!”

Also, in the same way that every popular Disney franchise (Marvel’s Avengers, Star Wars) ends up getting a Phineas and Ferb cross-over, pretty much every major telecom issue (USF, Tech Transition) gets a network neutrality cross-over.

Major Plot Points For this Season: Net neutrality deserves its own blog post, and we’re up to 4000 words already. So I’ll make this short. At this point, the big issue is whether, even if the FCC defines wireline residential broadband as a Title II service, it can still regulate mobile broadband as a Title II common carrier.

The heart of the argument goes to the definitions in Section 332. According to Section 332, a mobile service is either a “commercial mobile radio service” (CMRS), the functional equivalent of a CMRS, or a Private Mobile Radio Service (PMRS). CMRS services must be regulated as Title II common carriers. PMRS services cannot be regulated as a Title II common carrier. If the FCC finds that something is not itself a CMRS service, but is the functional equivalent of a CMRS service, than it can regulate it as Title II but is not required to regulate it as Title II. In 2007, the FCC found that mobile broadband was PMRS.

Needless to say, the carriers insist that the FCC cannot change its 2007 determination no way no how not ever. — and certainly not on the basis of the record here. And even if the FCC could change it’s mind on the classification, it didn’t give proper notice. So there! Those of us supporting Title II say mobile broadband is totally CMRS, or at the very least the functional equivalent of CMRS, the record fully supports these findings, and the FCC gave everyone lots of notice. If you’re really interested, you can see this Verizon filing, this CTIA filing, this filing by Public Knowledge, this filing from the Open Technology Institute (OTI), and this joint filing by PK/OTI/ Center for Democracy and Technology.

Given the FCC now hopes to get an Order voted out on this by the February Open Meeting on February 26, I have no doubt I will write a lot more about this over the next two months. Hey, where’s Perry?

That’s a Lot of Highlights!

Yup. I think 2015 will turn out to be a bang up season for spectrum stuff. Gonna be fun times.